Found the answer in Google Groups: Google Desktop Plug-in: Outlook
Attachments. Someone posted that they found a read-only Word file in:
c:\Documents and Settings\...\Application
Data\GdsAttachmentIndexes\GdsAttachementIndexerTem pDir\

Though they didn't specifically say that deleting it did the trick, it
did in my case. So, in summary, empty the OLK* folders, delete Google
Desktop's GDS Attachment Search
addin, and empty the GDSAttachementIndexerTempDir\ too. Reboot, and
ta-da, no more error.

Thanks, Diane & Brian for steering me to the correct location of the
OLK* folders, and Daniel for pointing out the GDS problem.